A demat, trading and a bank account are the trifecta of accounts for any stock market investor. The dematerialisation (demat) account holds your shares in an electronic format, eliminating the tedious paperwork previously required for storing the certificates of shares and other financial instruments in a physical format.
Your demat account is held on your behalf by either of the two depositories registered with SEBI--the Central Depository of Securities Ltd. (CDSL) or the National Depository of Securities Ltd. (NDSL). Once you open a one, you can use it to buy and sell shares and hold different investments such as bonds, government securities, mutual funds, and ETFs.
You can choose to open one online or offline by visiting your brokerage firm. In addition, you need to give power of attorney to your broker to settle your trades; this needs to be done physically.
Read more: Types of Demat Account
Fill up an application form and attach a passport-size photograph
Submit original documents for proof of address and identity (passport, Ration card, utility bills, PAN card, Aadhar card, etc), proof of income (net worth statement, IT returns).
Pay the necessary charges for opening the account and complete the in-person verification.
Begin your trades once your documents are approved, your account is operational and you receive an account number.
The PAN card is a mandatory document required to open a demat account. In August 2017, the SEBI made Aadhaar mandatory for buying shares and mutual funds. The Government issued this mandate in an effort to prevent money laundering via the stock market. This requirement, however, was revoked in September 2018. Currently, linking of Aadhaar to demat, trading, or bank accounts is not mandatory as the government plans to revisit the e-KYC process. So, you can now open an account without an aadhaar card.
Nonetheless, your aadhaar card can be submitted as a valid proof of identity, and you can submit your e-aadhaar card if opening a demat account online.
So, go ahead and open your Demat account even without an aadhaar card! You can also consider opening 2-in-1 or 3-in-1 accounts, which eliminate the need of having separate bank, trading, and demat accounts.
0 people liked this article.